3 High-Quality Stocks Getting Stomped by the Market. Time to Buy?

• StockStory Top Pick V -0.22% AXON +0.81%
• BKNG +0.11%

Quick Read

• Visa (V) delivered $40B in revenue for fiscal 2025 with 11% growth but lags the S&P 500 by over 9 percentage points this year.

• Axon Enterprise (AXON) plunged 20% after Q3 earnings missed despite 31% revenue growth as tariffs compressed margins to 25%.

• Booking Holdings (BKNG) trades at 18x forward earnings below its historical 25x multiple despite solid Q3 results with $9B revenue.

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The broader market has surged to record highs in 2025, with the S&P 500 up about 14% year-to-date. Yet this rising tide has left many boats high and dry. A chunk of stocks sits underwater for the year or lag the indexes by double digits, echoing the wide divergences from the late-1990s tech bubble when growth darlings overshadowed steady earners.

Economic jitters, sector rotations, and earnings hiccups have amplified the pain, hitting even blue-chip names. The three stocks below trail the S&P 500 by 10 to 20 percentage points despite solid fundamentals. Visa (NYSE:V), Axon Enterprise (NASDAQ:AXON), and Booking Holdings (NASDAQ:BKNG) are all quality outfits with durable moats and long-term growth tailwinds, but at today's prices, do they scream "bargain" or "proceed with caution"?

Visa (V)

Payments network giant Visa has delivered just 4.6% returns this year, well behind the benchmark index. Shares trade around $330, down from a June peak near $375. The lag stems from investor worries over moderating growth amid economic uncertainty.

Fiscal 2025 wrapped with revenue of $40 billion, up 11% year-over-year, and adjusted EPS of $11.47, up 14%. Fourth-quarter revenue hit $10.7 billion, a 12% increase, with payments volume up 9%, processed transactions at 67.7 billion (up 10%), and cross-border volume excluding intra-Europe rising 11% in constant dollars -- driven by 13% e-commerce gains but tempered by a stronger dollar and softness in U.S. outbound transactions. Net income reached $20.1 billion for the year, supporting $12 billion in buybacks, though regulatory probes into fees added overhang.

Long-term, Visa's prospects shine. As a duopoly player with Mastercard (NYSE:MA), it benefits from the shift to digital payments, with global transaction volumes projected to rise 10% annually through 2030. Analysts forecast 12% revenue growth in fiscal 2026, fueled by emerging markets, fintech tie-ups like stablecoin pilots, and value-added services up 25% in Q4. EPS should climb 13% to $12.95, with dividends up 18% CAGR historically.

At current levels, Visa trades at 22x forward earnings, a nominal discount to the S&P 500's 23x but justified by 25% margins and a $632 billion market cap. With a Strong Buy consensus from 24 analysts and a $394 average target -- implying 20% upside -- it's a hold for existing owners. New buyers might wait for a dip below $300, given recession risks that could crimp volumes further.

Axon Enterprise (AXON)

TASER and body camera maker Axon Enterprise has cratered 13% year-to-date, trading near $517 after a 20% post-earnings plunge in early November. This trails the S&P 500 by over 20 points.

Q3 revenue beat at $711 million, up 31%, driven by 41% software growth and recurring revenue hitting $1.3 billion annually. But adjusted earnings of $1.17 per share missed estimates by $0.37, hammered by U.S. tariffs jacking up costs and margin compression to 25%. Investors fretted over full-year guidance holding at $2.74 billion in revenue, as connected devices like Body 4 grew 24% but faced supply snags.

Looking ahead, Axon's growth story remains compelling. The public safety tech market could expand to $50 billion by 2028, with Axon capturing share via AI tools like Axon Assistant and VR training. Q4 revenue eyes $750 million to $755 million, implying 31% full-year growth. An international push and enterprise verticals, such as healthcare trials for Body Workforce, add tailwinds, with analysts projecting 25% annual growth through 2027.

At 68x forward earnings, Axon's premium is steep versus peers, but Wall Street maintains a Strong Buy rating with a consensus price target of $822, implying 58% upside. Tariffs and a $2 billion debt load pose risks, so it's a buy for growth chasers under $500, but trim your holdings if margins slip below 24%.

Booking Holdings (BKNG)

Booking Holdings, the operator of Booking.com and Priceline, is down 1% in 2025, lagging the S&P 500 by 15 points amid a travel cooldown. Shares hover below $5,000, off July highs above $5,800. Still, Q3 gross bookings rose 14% to $49.7 billion, with revenue up 13% to $9 billion. Room nights grew 8%, led by alternative stays and growth in Asia.

Yet the stock dipped 2% after earnings on Q4 guidance: mid-single-digit bookings growth due to tough comps, U.S. slowdowns, and geopolitical noise like Middle East tensions. Competition from Airbnb (NASDAQ:ABNB) and direct hotel apps eroded some market share.

Over the horizon, Booking's outlook is solid. Global travel demand should grow 8% annually to 2030, with AI tools like Smart Messenger boosting conversions 10%. Alternative accommodations and flights (up 32%) drive diversification, while Genius loyalty ties in 40% of bookings. Full-year earnings eye $227 per share, a 21% increase, with EBITDA margins at 36%. Booking's business, though, is solidly backed by $16.5 billion in cash.

At 18x forward earnings -- below its historical 25x -- Booking stock is undervalued for a near-18% EPS CAGR to 2030. The company has a Moderate Buy consensus rating from 25 analysts who target $6,207 per share, suggesting 26% upside, making the stock attractive now. Economic fragility warrants caution, but it's a buy for patient holders eyeing a recovery in 2026.

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